Mortgage rates climbed to their highest point in four months this week, rising to pre-Brexit levels.
When Britain voted to withdraw from the European Union in late June, home-loan rates went into a summer swoon. Lately, they have begun to rebound.
But their ascent may be short-lived. With the bond market leveling off this week, mortgage rates may settle in.
Bankrate.com, which puts out a weekly mortgage-rate-trend index, found that more than two-thirds of the experts it surveyed think rates will remain relatively unchanged in the coming week, meaning they will move less than plus or minus two basis points. (A basis point is 0.01 percentage points.)
According to the latest data released Thursday by the Federal Home Loan Mortgage Corp., the 30-year fixed-rate average grew to 3.52 percent with an average 0.5 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 3.47 percent a week ago and 3.79 percent a year ago. The 30-year fixed rate has jumped 10 basis points in two weeks.
The 15-year fixed-rate average rose to 2.79 percent with an average 0.5 point. It was 2.76 percent a week ago and 2.98 percent a year ago.
The five-year adjustable rate average increased to 2.85 percent with an average 0.4 point. It was 2.82 percent a week ago and 2.89 percent a year ago.
“This is the first week in over four months that rates have risen above 3.50 percent,” Sean Becketti, Freddie Mac chief economist, said in a statement. “This month, mortgage rates seem to be catching up to Treasury yields and returning to pre-Brexit levels.”
Meanwhile, mortgage applications were flat this week, according to the latest data from the Mortgage Bankers Association.
The market composite index – a measure of total loan application volume – ticked up 0.6 percent from the previous week. The refinance index fell 1 percent, while the purchase index increased 3 percent.
The refinance share of mortgage activity accounted for 61.5 percent of all applications.
(c) 2016, The Washington Post · Kathy Orton
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